Summit News

Manhattan buyers seek comfort over prestige

NEW YORK (Reuters) - Scorched by a real estate crash, New York buyers are finally returning, but this time they want a comfortable home rather than a quick flip.

And like never before, they don’t want anyone to know what they are buying.

“People are now looking at things in a different way,” Pam Liebman, president of Realogy Corp’s Corcoran Group unit, said on Monday at the Reuters Global Real Estate and Infrastructure Summit in New York.

Buyers are now asking themselves what would make them happy, said Liebman, whose company is the largest residential real estate company in New York City. “It’s not an investment; it’s not a flip. It’s much more a traditional investment than a flip.”

Liebman said that state of normalcy is far from normal in a city marked by booms and busts in its property market.

She said she expected to see prices slowly rise as the economy gets stronger.

New York's real estate market followed the rest of the U.S. housing market into a deep swoon after the collapse of the Lehman Brothers LEHMQ.PK investment bank in late 2008. That abruptly ended an era marked by aggressive bidding wars and of foreign buyers scooping up large chunks of apartment buildings.

Driving part of the change was a new caution among buyers as well as lenders, which still are very reluctant to loan money and want 30 percent down.

“Buyers are still struggling to get jumbo loans,” or those for more than about $730,000 in New York, Liebman said. “We’ve been meeting with a lot of the big banks to say ‘what’s going on?’”

While just a few years ago New York buyers flaunted their purchases and launched into price wars for multimillion trophy apartments with the best views of Central Park, they now have modest tastes.

“They do their homework and don’t overextend themselves,” said Liebman.

One of the biggest changes: In response to an era of frantic real estate blogging and tabloid coverage of megadeals for property, buyers are demanding that brokers keep mum about the transactions they handle.

“People don’t want others to know what they’re doing,” said Liebman. “I think they want to flaunt it less because of the (economic) environment ... The amount of confidentiality agreements is through the roof.”

Buyers have come roaring back to New York’s preferred luxury vacation market in the Hamptons, a few hours drive from New York, Liebman said. Sales of beach property, which plummeted by about 65 percent immediately after Lehman’s collapse, have picked up dramatically.

“In the second part of 2009, we had an unbelievable selling season,” she said. “It was the best December in our (six-year) history.”

Liebman said buyers have increased their offers, and sellers have been more reasonable about what they expect for their properties.

“There’s a lot of pent-up demand, which really drove buying out there,” she said. “If you want to live here, unless you’ve bought at real peaks of the market, (you will) do very well.”

Liebman lives in New Jersey.

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Reporting by Tom Hals, Chelsea Emery and Helen Chernikoff; Editing by Lisa Von Ahn